FREE RESOURCES: Car Buyer Checklist

Buying a used car is a tough task but with enough research and preparation you should be able to go out there with confidence and find the best deals. Here, we will give you some tips that will help you with your preparation.

Legal Documents

1. Ensure the seller has the title

The car title is a document establishing a person or business as the legal owner of a vehicle. It is the most crucial requirement for ownership transfers and must be secured by the buyer when the deal is closed. The car title will show the following:

Identifying information about the vehicle. It will include the vehicle identification number, make, and year of manufacture.
The license plate number.
Technical information about the vehicle to define its taxation regimen. This are the gross vehicle weight, motive power, and purchase price when new.
The name and address of the “registered owner” who owns it.
If money is owed on the vehicle, the name of the lienholder or “legal owner” to whom this money is owed.
The certificate of title will also include the brand if the vehicle is water damaged or salvaged etc.

Take note of the title number and the name on the title so you can validate from the DMV. Get the VIN so you can check if the title is branded. You may use the details found on the title when you do a background check to find out if the vehicle was stolen, junked or if it has been in an accident.

2. Ensure there are no liens on the vehicle

When a vehicle is financed, the certificate of title is normally held by the lender who must release it to the purchaser once the balance is paid off. In some states the transferred title is sent directly to that individual but the name of the lender or lienholder appears on the title as well. In order to release the lien upon full payment, the lender sends a notarized release or other complementary document to the individual. A popular example is the “Notice of Security Interest Filing”. This is done in order to prove that the lien has been satisfied and that the seller has no withholding obligations in the financing institution. A letter from the financier will also be sufficient enough in cases where a “Notice of Security Interest Filing” is not available.

3. Secure a copy of the sales tax clearance

States impose sales tax on their residents and visitors who purchase certain goods and services within their borders. This also applies to used cars. The seller is obliged to pay it and normally they pass the cost to the buyer. Make sure that you keep a copy of the receipt as a proof that it has been paid. It is also a requirement when you register the car.

4. Secure a copy of the "Certificate Of Registration"

This is an official document providing proof of registration of a motor vehicle. Make sure that you secure a copy of this because some states will require you to provide the old certificate when you register the vehicle as the new owner. Upon registration, you’re issued with a certificate, one or two licence plates and the receipts of the fees paid.

Money Matters

1. Determine the fair market value of the car

The factors that will affect the vehicle’s value are:

One of the best ways to compare prices and find out the value of a used car is to look in the Kelly Blue Book (also known as the KBB for short) or do a search on their website. Another way is to search for cars exactly like what you intend to buy on Craigslist, eBay Motors or other classified sites. You will have a general idea of how much the automobile is worth. You can get a general ball park figure of how much the car may be worth. Another site where you can check out used car values is known as NADA.

2. Calculate the cost of ownership

The number on the price tag is only the tip of the iceberg. You’ve narrowed your choices to two, but you can’t seem to decide which one is really the better deal. One way to find out is by calculating “the cost of ownership” and adding it to the money on the price tag. In reality here are the factors that will determine the true cost of the car:

Point of sale price.
Cost to finance – The amount of interest paid over five years.
Taxes and fees – The total of all sales tax, fees and registry costs each year.
Insurance premiums – The average cost of insuring the car.
Fuel – How much you have to pay for the type of fuel that the car requires: regular or premium gasoline or diesel fuel. To calculate cost of fuel: miles driven / miles per gallon x price of gas per gallon.
Maintenance – the total cost of performing all the scheduled maintenance found in the vehicle’s owner’s manual.
Repairs – the projected cost of fixing common mechanical problems for this vehicle. A wise way to avoid unexpected repair expenses is to buy a Certified Used Car (CPO). These cars have been inspected and certified. They have an extended warranty and special add ons. You may check out VinAudit partner CertifiedCars.com to find great deals on certified used cars.
Depreciation – Resell and trade in value in 5 years. Normally, it is around 5 thousand dollars depending on the model and condition.

Click here to check out VinAudit’s Ownership Cost Calculator.

3. Secure financing

With financing in hand, you are in a very strong position to get the best pricing on a used car. You can negotiate like a cash buyer since you already have the funding so the price can easily be at your command.

Check your credit score (official federal site: AnnualCreditReport.com)
Get pre-approved for financing quotes from your local bank and quote comparison services like MyAutoLoan.com.
Calculate the monthly payments you can afford.
Payment Calculator – Calculate how much your payment will be, given a specific loan amount.
Loan Amount Calculator – See what your loan amount could be given a specific payment amount and annual interest rate.
Interest Only Loan Calculator – You can use this interest-only loan calculator to figure out your monthly payments, if you decide to take out an interest-only loan.

4. Estimate your insurance costs

There are wide variations in insurance rates. Before you buy, seek out an insurance estimate for each car you have in mind, just to be sure the cost doesn’t change your decision. Once you’ve gathered car insurance estimates, eliminate those who are out of your price range. However, do not automatically choose the cheapest. Maybe a company with a more expensive policy for your particular car also has a feature that would make sense for you and can be worth the extra cash. You can go to websites like carinsurance.com to compare insurance policies. Comparing insurance rates by car should be a priority before you make a final decision on your purchase. Just keep in mind that the rate you see quoted isn’t the full story. The value you’re getting for your money and the discounts you may qualify for can shift the balance between companies. So seek out as many quotes as you can before buying to make sure you get the best deal possible.

Vehicle Inspection and Test Drive

Inspecting the car will help you determine its existing condition and can also highlight potential issues that could arise after purchase. Having it completely checked, you’ll either feel more confident that you’re making a great investment or you’ll discover that there are hidden flaws that could give you more leverage to knock the price down.

1. Check the body for dents and scratches

Check for awkward dents and carefully go through the body lines, make sure that they’re even. Uneven body gaps will allow water to penetrate and will corrode the inside. It is also your indicator that it has been through the shop for a major body work. Check the inside seams, make sure that they’re all still factory looking. If the alignment does not look right be sure to ask why. Your goal here is to find out if the car was wrecked and find out if there are major frame damage that will make the car unsafe to drive.

2. Check the tires

Check the wear on the tires, make sure the depths of the thread are still good. Tires can tell alot about the car. Not enough depth means you will have to replace it soon, half a fingernail will last a while. Tires have 4 digit codes:

eg1. “1206” – means that it was manufactured on the 12th week of 2006.
eg2. ”0114″ – means that it was manufactured on the first week of 2014.

If you find a car with brand new tires be sure to ask why, they replaced that for a reason. Also make sure that there’s a roadworthy spare tire.

3. Check the odometer

Make sure the odometer gauge is aligned correctly. It shouldn’t be crooked, there should be no gaps. Check if it jiggles when you bang on the dash with your hand. If the vehicle has an analog odometer, as opposed to newer digital readouts, check that the numbers are lined up straight. If you are checking a car with a digital odometer, it will be difficult to see physical signs of tampering. You can only know by dismantling the instrument cluster to see if the odometer has been desoldered. However, you can look for service stickers inside the door or under the hood that may give the actual mileage. If the odometer has been replaced or if a mileage correction was done, there will be a sticker showing:

The date of installation.
The vehicle’s last known mileage prior to the repair or replacement.
The mileage added to the vehicle while the odometer was inoperable, if any.

You should also look at the owner’s manual for maintenance records. Make sure that there are no missing pages. It is also smart to contact the service center to validate the service manager‘s signature. Tampering the odometer not only raises the value of the vehicle, it also deceives buyers that the vehicle is in better condition.

4. Check the fluids

You will know if the vehicle was properly maintained by checking the fluids. Here are some important points that will help determine the car’s condition just by checking the its fluids.

Look at the engine oil fluid using a dipstick and a piece of cloth. Brown/yellow tinted is an indication that it was well maintained.
Check the brake fluid. Yellow tint is good. Condensation may turn it reddish but it’s still fine.
Check the coolant fluid. Look into the pressurized reservoir. Lime green color for a properly maintained car.
Transmission fluid. It is reddish for properly maintained cars. If there are creamy residue floating, that means there’s an issue.
Check the power steering fluid. It is red or clear if it was properly maintained. Any color aside from this means there’s an issue.
Check the battery. Corrosion around the battery can cause problems especially during winter. Make sure that the hose and belt are still firm. Make sure that it is not worn and brittle. Feel them so you can gauge if it will last long or may give out soon and start leaking.

5. Check the engine

Look at the check engine light make sure that it will not stay on when you start the vehicle. If it stays on that means that the engine has a problem. Look underneath the vehicle to spot leaks. Perform an initial engine test:

Step on the accelerator and the break at the same time.
Set it to drive and step on the gas all the way down while holding down the brake.

A well maintained engine will not die. If it does, that means that the engine has issues.

6. Check the interior

Start inspecting the windows, the door locks, air conditioning and the sound system. Check the buttons that control the side mirrors, signal lights, wiper blades and the cruise control button. Make sure that they operate properly. Remove the back seat and check out the foam below for water lines and molds to see if it was flooded. Most shops will do a good job removing the waterlines outside but leaving marks on the inside. If you notice anything that’s not functioning right, bring it to the seller’s attention have them fix it or use it to reduce the price.

7. Check the electrical circuits

Start by inspecting the wiring physically. Follow the path to how it was laid out and check if anything is loose or not properly attached. You do that to check the obvious like missing, disconnected and worn out wires. Second, you should check if it is flowing properly. This is done by performing a grounding test using a multimeter or voltmeter. How to perform a quick grounding test:

Place the test lead to the battery, make sure negative is place to the negative pole and positive to positive.
Take note of the result.
Then remove the negative test lead and test the engine. Take note of the result. If it shows the same numbers then you do not have an issue.
Do the test again while the engine is running.

Make sure that you get the same result or close. A difference of .4 of a volt or more is an indication of a grounding issue. You can also have it checked by a professional mechanic. With the seller’s consent you can drive to a nearby shop where you can have it checked or you can go online and find several websites offering pre – purchase inspections like yourmechanic.com and inspectmyride.com. These companies offer multiple point inspections to make sure that you are buying a good car.

Vehicle History

As a consumer, you can reduce your risk of being defrauded, either intentionally or unintentionally, by getting a vehicle history report before purchasing. It contains important information about a used vehicle’s past. These reports generally show title records from each state DMV, along with salvage and insurance total loss records and accident records which is vital for consumers when choosing which used vehicle to purchase, as it can indicate issues with the vehicle’s safety and value.

1. Get a vehicle history report

You can get a vehicle history report from VinAudit. VinAudit is a first level consumer access provider for the National Motor Vehicle Title Information System, offering reports at an affordable cost.

FREE RESOURCES: Car Buyer Checklist

The most comprehensive Automotive Data & Analytics

SERVICES

RESOURCES

CUSTOMERS

ABOUT US

, Inc.